Raising Prices Make Plastics Import From China Difficult For European And Us Manufacturers

Over the past few years, Chinese manufacturers of plastic resins and rubbers have been extremely successful in exporting their products into Europe. This happened for a number of reasons such as the improved processing technology adopted by Chinese companies, the achievement of the european and US quality standard certifications as well as an aggressive pricing policy which made life difficult for European producers.

Many Chinese processors of resins such as PVC, polypropilene, methacrilates, CPE as well as synthetic and thermoplastic rubbers expanded sales into Europe very rapidly and even managed to achieve a significant brand awareness amongst manufacturers of sheets, profiles, films, pipes, fittings and so on.

The success of the Chinese was not only due to an improved quality of their products but to the co-operation of traders and distributors which created a solid bridge between China and Europe. One of the main problems of Chinese corporations was in fact the lack of knowledge and skills in terms of import-export procedures and operations.

The growth of the international plastic business was confirmed in March 2007 by the success of the China Plas 2007 which took place in Ghuangzhou. The Cantonese City was literally inundated by european and american manufacturers of injection moulding and extrusion machinery to sell and traders and distributors to buy raw materials.

After less than a semester the situation has completely changed and September looks pretty bad for importing resins from China. The European Community has in fact created entry barriers with new anti-dumping policies and, at the same time, the Chinese government has reduced the export incentives by over 50%. To worsen the scenario for Chinese exporters was the currency, which became gradually stronger over the Euro and the US dollar.

This rapid change was clearly a good new for the European and US processors which as from September can gain back market shares. However, it was a very bad new not only for the Chinese producers but mainly for the traders which benefitted from the growth of the Asian export activity.
Even though the labour costs do allow Chinese manufacturers to have competitive prices, their production is not fully optimised to allow a flexible pricing policy and they are still not well organized for international sales. For this reason they now prefer to concentrate on their huge domestic market and withdraw from overseas expansion

Alessandro Cirinei - EP Energye Plastiche Group srl http://www.energyeplastiche.it/index.php?/en/

Tags: chemicals, CPE, extrusion, injection, plastic resins, plastics, PMMA, polymers, POM, PP, PVC, rubber

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